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Publishing News: Penguin settles, Macmillan holds its ground

Apple and Macmillan stand alone against the DOJ's ebook lawsuit, PressBooks opens up, and Amazon may be inviting disruption.

Here are a few stories from the publishing space that caught my attention this week.

And then there were two

In headline news this week, the Penguin Group announced it had reached a settlement agreement with the Department of Justice. Jim Milliot reports at Publisher’s Weekly that the “[t]erms are nearly identical to agreements reached with Simon & Schuster, Hachette and HarperCollins, but according to the government, if the Random House-Penguin merger is approved the newly formed company must abide by the agreement.” Milliot notes that as Random House is not involved in the DOJ lawsuit, it can continue conducting its ebook business under the agency agreement in the meantime.

Laura Hazard Owen reports at PaidContent that “Penguin is discussing a similar settlement with the European Commission and that the DOJ’s case will continue against remaining defendants Apple and Macmillan.

Owen reports in a separate post at PaidContent, that Macmillan’s CEO John Sargent has made it clear that the publisher has no intentions of settling. Owen quotes from a letter Sargent sent to Macmillan’s trade authors, illustrators and agents pinpointing the reasons why the publisher won’t settle — Sargent writes:

“First, it is hard to settle when you have done nothing wrong. Much as the lawyers explain to me that settling is completely standard business procedure, it still seems fundamentally flawed to me somehow. … The second reason is the more important one. Since the very beginning, the government’s demands have never wavered in all our discussions. They still insist on the two year discounting regime that forms the heart of the agreement signed by the three settling publishers. It was our belief that Amazon would use that entire discount for the two years. That would mean that retailers who felt they needed to match prices with Amazon would have no revenue from e-books from five of the big publishers (and possibly the sixth) for two years. Not no profit, no revenue. For two years. We felt that few retailers could survive this or would choose to survive this.”

Owen reports as well that though Macmillan won’t settle, the publisher “voluntarily entered new retailer contracts that conform with many of the requirements in the DOJ’s settlement.”

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Open source publishing allows for new models and experimentation

PressBooks founder Hugh McGuire announced this week that he’s making his online book publishing company open source. In a blog post announcement, several reasons were listed for the change, including:

“We believe the future of books requires new models, and new models need open platforms to allow publishers and authors to experiment.”

Hamish McKenzie reports at PandoDaily that “[b]y the end of January, PressBooks will be available as a WordPress plugin under the open source GPL license, allowing developers to build on the platform and enhance the product.” McKenzie notes McGuire’s bigger vision for an open source PressBooks:

“McGuire sees potential for making ebooks published using PressBooks fully semantic, meaning their data could be structured in such a way to be universally readable, and therefore more usable, by Web services. For instance, a service might be built to identify all locations mentioned in an ebook and to link them to a database that lists books by places. Essentially, such a book would have an API.”

PressBooks is a piece of a much larger picture for McGuire. “McGuire’s long-term vision for the future of books is that they will become Web-native products,” McKenzie writes, “with ebooks and print books as corollaries to what exists on the open Web.” You can read McKenzie’s full report at PandoDaily.

Amazon may be its own worst enemy

Forbes’ Suw Charman-Anderson made a case this week that Amazon is ripe for disruption in the publishing arena, that it may be made to face a dose of its own medicine “if it doesn’t start to address its weaknesses soon.” She points to several chinks in Amazon’s armor, including its broken reviews system, noting that as readers get frustrated with unreliable reviews, they will look elsewhere for book information, eroding “Amazon’s position as the canonical reference for books.”

Two of the biggest factors that could contribute to the erosion of Amazon’s dominant position in the publishing industry are its refusal to pony up publishers’ data. Charman-Anderson writes:

“Anyone who understands the importance of data understands how badly Amazon fails publishers. … Data is gold. Amazon provides iron pyrites. How long are publishers going to carry on sacrificing data on the alter of Amazon’s reach? Indeed, Amazon actually prevents self- and traditional publishers from innovating. If they want to bundle an ebook with the paperback, they can’t do that through Amazon. If they want to provide extras, cross-sell, up-sell, or invite buyers onto their mailing list, they can’t do that through Amazon. If they want to forge a direct relationship with their customers or create a community, they have to move away from their reliance on Amazon. It is simply impossible to innovate at the point of sale if you do not control it.”

Charman-Anderson also points out that “[i]t’s not agency pricing the publishers need, it’s the balls to play a long game.” You can read her full report on why Amazon will not be able to maintain its dominant position with a status quo strategy at Forbes — it’s this week’s recommended read.

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  • Kinshtech

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